Cineworld share (LON: CINE) price is in a downward spiral once again as it couldn’t secure any all-cash bid. There were rumors of a Vue takeover after the firm got a nod from its shareholders. However, last week Cineworld cinemas reported that the buyers were not interested in its UK & US assets.
Cineworld is the biggest theatre chain in the United Kingdom. Before the lockdowns, the Cineworld share price was trading around 220p. However, the next few years proved to be the toughest for the cinema operator as it failed to generate any revenue in lockdowns.
Consequently, the firm failed to meet its more than $6 billion in liabilities and filed for Chapter 11 bankruptcy. In the latest court session, the Cineworld lawyer told the judge that they only received offers for their rest of the world assets. These offers were for the company’s assets in eastern Europe, central Europe, and Israel. As the news of the court proceeding came out, Cineworld share price took a nosedive.
It was also revealed that none of the 40 bids that were received fell close to $6 billion. The firm also failed to secure an all-cash offer. The second and final bid deadline is now set at April 10. In the meantime, the firm is negotiating with its creditors on a reorganization plan.
The price chart shows a very alarming situation for the long-term holders of Cineworld stock. The price has lost more than 99% of its value in the past 3 years. In 2023, the price surged to 6p on the news of a potential Vue takeover. However, the pump got retraced in the following days as the deadline set for bid submission ended without any all-cash offer.
On Monday, the price showed increased volatility and dropped to 2.1p in the initial hours. However, it is now trading above 2.64p after showing a slight recovery. In the coming days, I won’t be surprised if the price tanks below the 2022 low of $1.814. Considering the recent developments, Cineworld shares appear to be a very risky buy. It is better to wait till some positive news comes out.
This post was last modified on %s = human-readable time difference 09:56